Teaching Kids About Cash

Between the ages of 2 and 4, children learn to count, and by age 4 they know that in order to get what they want in a store, they have to pay for it. By age 5 or 6 they can distinguish between pennies, nickels, dimes and quarters, and many kids are already making small purchases on their own.

The earlier children get used to handling money and dealing with change, the better. It gives them "money confidence". What follows are some great learning opportunities parents and child care providers can use to teach preschoolers about money.

What Children Learn From Money

Money teaches children counting, shapes and sizes, sharing, identifying things, decision making skills, budgeting, the value of work and responsibility.

Social Skills

There are many opportunities to teach children about money while at the same time enhancing their social skills. In your dramatic play area you could set up a restaurant, grocery store, flea market, etc., complete with menus, plastic food, and play money. They can pretend to be waiters and waitresses, cashiers and shoppers.

You might also let your children play store with a little bit of real money. Give them plastic change purses to carry some pennies, nickels and dimes in. (See the Art and Craft section below to make change purses.) Encourage the children to count their money before they go out shopping so they can get an understanding of how much money they have and what they might be able to buy with that money. This is also a great time to talk about saving when the children see they don't have enough money for a higher ticket item.

While playing storekeeper, waiter, etc., you can talk to the children about how these people earn their money. This will open up a discussion about allowance, saving money, banking, budgeting, etc. Teach children that family members work to pay for food and clothes. Let the child visit different workplaces like the grocery store, the fire hall, even the public library.

A visit to the bank would also enhance their learning experience with money. It provides an opportunity to talk about ATM machines and that their parents can't get money out of the bank or machine unless they put some money in, and so on.

Language Skills

Read stories about money matters and responsibility. Your librarian will be happy to help you pick out simple easy-learning books on money, like, Pigs Will Be Pigs : Fun With Math and Money by Amy Axelrod, The Go-Around Dollar by Barbara Johnston Adams, 40 Ways to Teach a Child Values by Paul Lewis, or Pick Up Your Socks...and Other Skills Growing Children Need! by Elizabeth Crary. Don't forget to check out our list of Web sites below that can help you teach children about money in a fun and interactive way.

Here's a great little song and coin recognition exercise the kids will enjoy. Write the following song (sung to the Farmer in the Dell) on a white board or large piece of paper and tape the corresponding coin at the end of each line. :
A penny is worth 1
A nickel is worth 5
A dime is worth 10
And a quarters worth 25

Arts & Crafts

Change Purse
Cut an rectangle out of heavy construction paper. Fold the paper two thirds of the way to make the change section of the purse and leave enough room for the flap. Glue the sides together. Cut a circle or square of Velcro and glue to the inside of the flap and close to the top of the inside portion of he change purse. Let the children decorate their purse with beads, glitter, or just with markers or crayons. Put each child's name on his her purse. You could also make the purse out of plastic, punching holes along the side and having the children string the purse together. A snap could hold the purse closed.

Money Jars
Have the children decorate three jars or cans, then label them Spend, Save and Share and put their names on the jars. The children can put a portion of their allowance into each jar so they can see what they can spend now, how fast their money is growing, and how they can share their money with the less fortunate, or to help a worthy cause.


Help the children make some simple baked goods such as muffins or cookies to host a bake sale. Have them make notices about the bake sale to post at the facility and to send home with the parents. At the end of the day the children can set up the goodies for the parents and themselves to purchase. This helps the children learn the value of their money, to give change to the parents, and how working (i.e. being a baker), helps them earn money.

You could also bake cupcakes and set up different stations around the room where the children can pay a penny for each decoration they want on their cupcake, like sprinkles, a cherry, etc. The money raised from the sale can be divided equally amongst the children and placed into their three jars made during crafts.

Children learn by what they see and do. Using coins, ask the children what they can see? Feel? Do? Talk about the different properties of coins. Paper money too. Talk about how money is made at the mint. Gather books from the library on the properties of copper, nickel, silver, etc.

Help the children start a coin collecting. Take some time going over the different dates on the coins, the different faces of the coins. Show the children some old coins if you can. Perhaps some parents can help you here. This is a great way to explain the history of money.

Using money is a great way to help youngsters learn to count. Take some time with the children
to really look at each coin and read the words on it. Ask them to look at the nickel and tell how the nickel is different from the penny in size, color, and value. Make a chart showing how many pennies there are there in a nickel, a dime, and a quarter. Or have each child draw a circle on a piece of paper and write a number on it from one to ten. The children can then take their pennies and place the right amount under each circle. You can do the same for a dime or a quarter, using nickels. Talk about the different combinations of coins for values more than five cents, such as five nickels make a quarter, two nickels make a dime, etc.

Save, wrap, count coins and take them to the bank.